Wednesday, November 27, 2013

The corner station resumes the limbo

I was right and wrong in The corner station jumps over the limbo bar.
On Wednesday, one of the stations down the street dropped its price to $3.19, the metro average.  By last night, all the stations had matched it.  The corner station was still there this morning, when I got half a tank.  I should have filled up, as this afternoon it had raised its price for regular to $3.39.  However, it shouldn't remain there long, as not only the stations down the street were holding steady at $3.19, but so were several other stations within a three mile radius.
The very next day, the corner station returned to $3.19, where it and all the rest of the neighborhood stations remained.  That's the right part.  The wrong part was "I think the neighborhood stations will settle on a price of $3.25-$3.29 by the first half of next week."  No such luck, and that's because the price of crude oil stopped rising over the weekend, which removed the impetus behind higher prices at the pump.  Thank diplomacy for that, as the likelihood of Iran pumping more oil has increased while tensions have decreased.  The prices of both Brent and WTI are now going down.

As for the pattern, all three average prices have stopped rising and are now on their way down.  Both the national and Michigan averages are at $3.27 and the Detroit average is at $3.21.  I expect lower prices after the Thanksgiving weekend.

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